Phil Suburban Dev Corp v The Auditor General

June 8, 1960: President of the Ph approved in principle the acquisition by the

People's Homesite and Housing Corporation of the unoccupied portion of the
Sapang Palay Estate in Sta. Maria, Bulacan for relocating the squatters who
desire to settle north of Manila, and of another area either in Las Pias or
Paraaque, Rizal, or Bacoor, Cavite for those who desire to settle south of
Manila.
o Financed thorugh flotation of bonds under the charter of PHHC in the
amount of P4.5M.
o The President informed PHHC of such approval by letter bearing the
same date
Board of Directors of PHHC passed Res No 700 authorizing the purchase of
the unoccupied portion of Sapang Palay
o Conditions:
Confirmation by the OEC and President
Portion of the estate to be acquired shall first be defined and
delineated
President shall first provide funds to effect the purchase and
devt
Contract shall first be approved by the Auditor General
President authorized the floating of bonds under RA 1000 and 1322 in the
amount of P7.5M
Dec 29, 1960: PET, owner of the unoccupied portion, and the PHHC entered
into a contract embodied in public document entitled Deed of Absolute Sale
whereby it conveyed into the latter the two parcels of land.
o This was not registered in the Office of the Register of Deeds due to
the fact, as PET claims, that the PHHC could not at once advance the
money needed for the registration expense.
Auditor General requested a re-examination of the contract because from
1948 to Dec 1960 the assessed value was at P131,590. On Dec 21, 1960 it
was at P4,898,110.00
o Despite the objection, the President signed the Deed of Sale
Turns out that as early as the first week of June, 1960, prior to the signing of
the deed by the parties, the PHHC acquired possession of the property, with
the consent of petitioner, to enable the said PHHC to proceed immediately
with the construction of roads in the new settlement and to resettle the
squatters and flood victims in Manila who were rendered homeless by the
floods or ejected from the lots which they were then occupying.
Provincial Treasurer of Bulacan requested the PHHC to withhold the amount of
P30,099.79 from the purchase price to be paid by it to PET because this was
the realty tax that was due on 1961
PET paid under protest and requested Sec of finance to order refund because
PET alleged that it was not the owner of the land anymore since the
execution of the Deed of Absolute Sale.

Alleged that there was presumptive delivery and the possession was
transferred to the vendee even prior to the sale
RESP: presumptive delivery does not apply because the sale needs to be
approved by the Auditor General first and the PET must first register the deed
and secure a new title. Until the deed of sale has actually been registered,
PET is still the owner and should be the one to pay the tax.
o

WN ownership was transferred to PHHC and Phil Suburban should not be the one
paying taxes?
YES.

Delivery (tradition) as a mode of transmission of ownership maybe actual

(real tradition) or constructive (constructive tradition). When the sale of
real property is made in a public instrument, the execution thereof is
equivalent to the delivery of the thing object of the contract, if from
the deed the contrary does not appear or cannot clearly be inferred.
There is symbolic delivery of the property subject of the sale by the execution
of the public instrument, unless from the express terms of the instrument, or
by clear inference therefrom, this was not the intention of the parties.
o ie: when a certain date is fixed for the purchaser to take possession of
the property subject of the conveyance, or where, in case of sale by
installments, it is stipulated that until the last installment is made, the
title to the property should remain with the vendor, or when the vendor
reserves the right to use and enjoy the properties until the gathering of
the pending crops
Case at bar: there is no question that the vendor had actually placed the
vendee in possession and control over the thing sold, even before the date of
the sale.
The condition that petitioner should first register the deed of sale and secure
a new title in the name of the vendee before the latter shall pay the balance
of the purchase price, did not preclude the transmission of ownership.
In the absence of an express stipulation to the contrary, the payment of the
purchase price of the good is not a condition, precedent to the transfer of title
to the buyer, but title passes by the delivery of the goods.
In a long line of cases already decided by this Court, the constant doctrine
has been that, as between the parties to a contract of sale, registration is
not necessary to make it valid and effective, for actual notice is
equivalent to registration
o Section 50 of the Land Registration Act provides that, even without
the act of registration, a deed purporting to convey or affect
registered land shall operate as a contract between the
parties. The registration is intended to protect the buyer against

claims of third persons arising from subsequent alienations by the

vendor, and is certainly not necessary to give effect to the deed of
sale, as between the parties to the contract.